Question 17a iii
Marking Guide
(iii) Substantive procedures for bank loan
– Agree the opening balance to the prior year audit file and FS 1
– For loan payments made, agree to cash book and bank statements 1
– Review the bank correspondence for late payment penalties, agree to statement of profit or loss 1
– Obtain direct confirmation of year-end balance from bank, agree to the loan schedule 1
– Review loan agreement for details of covenants and recalculate to identify any breaches 1
– Agree closing balance to the trial balance and draft financial statements and review the disclosure of the current liability bank loan in the draft financial statements 1
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Restricted to 4
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